NEW DELHI: The Enforcement Directorate (ED) on Friday arrested five persons in connection with Rs 56,000 crore bank loan fraud committed by erstwhile promoters of Bhushan Steel (BSL).
The arrested persons are Pankaj Kumar Tiwari, the former vice-president, banking of the company, former VP accounts Pankaj Kumar Agarwal, ex-chief financial officer Nitin Johri, Ajay Mittal, the brother-in-law of former promoter Neeraj Singal, and Ajay Mittal’s wife and sister of Neeraj Singal, Archana Mittal.
The investigative agency said that during the investigation it was revealed that the erstwhile Managing Director Neeraj Singal and his associates formed several shell companies. They rotated funds from one company to another through a chain of multiple entities.
The funds were circulated to infuse capital, buy property and for other personal purposes not intended by the Banks. They also prepared forged documents and made fraudulent representations before the banks to discount Letter of Credits (LCs) and diverted the funds back into their own companies with malafide intentions.
Funds were misappropriated against the fabricated LCs created in favour of JSW Steel Limited and Hindustan Zinc Limited. The misappropriated funds were diverted to other group/associated companies, causing wrongful loss to the State Bank of India and Punjab National Bank. The agency held a search operation on June 9 2023 at Neeraj Singal’s premises, and he was arrested by ED on the same day.